So this is a transcript of a webinar we did, and the main topic was effective labor rate. We’re going to give you some strategies to instantly increase your effective labor rate and give you some insight into how it works. We help our clients achieve effective labor rates that are not only higher than their posted labor rates, but most of the time when you get a higher effective rate that goes right to the bottom line. It increases your net profit and your gross profit percentage very quickly, so we are going to share some of those strategies that we use with you today.
The idea for this webinar started when I made a bet with Joe, a parts and service director in Florida, and so we called Joe to see what he’s doing and talk about the bet.
Joe – Hello
Chris – Joe, Chris Collins.
Joe – Hey how you doing?
Chris – Good. How is everything going there?
Joe – It’s awesome.
Chris – Nice. This is about effective labor rate, please explain to everybody what our bet was and then we’ll talk about what you did and what happened and you and I have a bet and what was the bet?
Joe – The bet was that we could sell 200 alignments at double our normal price and if I did that, Chris would pay for my advisor service training for three months. So that was officially the bet.
Chris – And so what was originally the price of your alignments?
Joe – Its original price was $68.88
Chris – And then went to $129?
Joe – It went to $125.88
Chris – Nice and then you sold 160 a month before?
Joe – 162 is the real number.
Chris – And then it ended at 205?
Joe – Yes
Chris – Awesome and good job. I’m going to talk about part of it and how we sold and the stuff we did talk about. We just need everybody to know that it does work. It doesn’t take a lot of magic to do it right? It’s pretty easy.
Joe – It was very easy, no complaints from customers. No trouble getting the advisers or hammerhead that we are doubling the price but I just said that we we’re giving it away before and that we’re entitled to that money and they come and step up and did a great job and sold it.
Chris – Awesome, good job. What happened to your overall effective labor rate? How much did that help out?
Joe –I just went over that before I get on the phone with you and our overall effective labor rate today is up for about 4 bucks,
Chris – Nice
Joe – Big deal, it’s a big deal.
Chris – Yeah, that’s huge. Well, great job Joe and thank you so much. I look forward to many more bets to come and I hope we can do some more fun stuff together and maybe next time I’ll lose something and that will be more fun to you.
Joe – It was a lot of fun to see that all we have to do is ask and pet the dog a little bit and make a whole lot of money. That worked out really well. Thank you Chris.
Chris – Awesome, thank you, we’ll talk soon.
Joe – All right have a great night.
Chris – bye
Joe – bye
Thank you, Joe, for coming on and talking to me. I think the results really speak for themselves when you look at these two years of effective labor rate. If you want to know what I shared with Joe, you can always accomplish the same results if you have the right pricing strategy and you execute well. It is very easy to accomplish that kind of result, and I think a lot of times we’re just embarrassed to tell people the effective labor rate.
It's like Joe said about petting the dog… all he had to do is ask. It’s amazing how many people don’t ask or afraid to ask and that’s one of the keys. You've got to pet the dog. It’s not just about the alignment.
Something that works in the front end won't always work in the back end. If a customers says no, you can’t just simply take no for an answer. You have to do it up front, you have to convince the customers to want the service you’re offering… you have to close a customer, right?
It doesn’t work that way in service.
I know there are a lot of guys out there pitching service advisor training like that, and that is not the way it works. You ask five times and you finally get a yes, but that customer is not coming back. You have to really understand the circle of life and the relationship with the customer that makes them come back over and over again.
Adapt the real system, your values have to understand that and learn how to pet the dog and how to create a relationship with the customer, how to present it and know how the system works. It’s very soft selling. The hard thing in our business doesn’t work. Hard selling might work in the front end, selling and pushing for a big car purchase, but in the back end, its got to be very soft.